With Regard to the Time Value of Money

question 103

Multiple Choice

With regard to the time value of money,

• A) amounts are adjusted for inflation over the period of the investment.
• B) the amount of the present value is always higher than the future value.
• C) the future value amount is always higher than the present value amount.
• D) the present value and the future value have to be equal.

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Definitions:

Ledger

A book or collection of accounts in which transactions are recorded, categorized, and summarized.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership value in the company.

Owner's Drawings

The amount of money taken out of a business by its owner for personal use.

Revenues

Revenues are the total amounts of money earned by a company from its business activities, before any expenses are deducted.